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Which Metro Areas Have Rising Prices and Faster Selling Time as of June 2018?

Home prices continue to increase although the pace of price appreciation has slowed. As of June 2018, the national median sales price of existing homes sold rose to a peak of $276,900, the highest level since 20001 when NAR started tracking this data. However, the pace of appreciation has been slowing. In June 2018, the national median sales price rose 5.2 percent on a year-on-year basis (2.2 percent on an inflation-adjusted basis), a slower rate of growth compared to the price appreciation of near or above 10 percent in 2013.

 

The question is: will home prices continue to increase? One way to think about this is to compare the price appreciation with days on market. If properties continue to sell at a faster pace, this means that demand continues to outpace supply, and there continues to be an upward pressure on prices. However, if properties are increasingly staying on the market longer, then this means that supply is starting to outpace demand, causing prices to fall. As of June 2018, the median list price increased compared to one year ago in 419 metro areas tracked by Realtor.com (414 in June 2017). Meanwhile, properties sold faster compared to one year ago in 495 metro areas (395 in June 2017).

The data visualization below shows the year-on-year change in median list price (Y-axis) against the year-on-year change in days on market (X-axis). Most metro areas lie on the upper left quadrant where the median list prices rose and the median days on market fell in June 2018 compared to one year ago. There are only three metro areas where days on market rose and median list prices fell: Johnston, PA; Enid, OK, and Minot, ND.

In the high price metro areas, the median list prices rose compared to one year ago, but they have slightly declined compared to May 2018 levels. In San Jose-Sunnyvale, the median list price rose compared to one year ago (14.7 percent), but the median list price decreased compared to the May 2018 level (-3 percent). In San Francisco-Oakland-Hayward, CA, median prices rose compared to one year ago (8.7 percent) but also slightly declined from the May 2018 level (-0.4 percent). In Los Angeles-Long Beach-Anaheim, CA, the median list price also rose compared to one year ago (5.2 percent) but declined compared to the May 2018 level (-0.5 percent).

In summary, in many areas, demand is still outpacing supply, so there is still upward pressure on prices for now in many metro areas, although prices have started to trend downwards modestly in high-price metro areas (e.g., San Jose, San Francisco, Los Angeles). Affordability challenges, rising interest rates, and the modest increase in housing starts are likely exerting a downward pressure on prices. However, over the longer-term, there is still the upward demographic demand pressure from those in the 35-44 age groups (mostly millennials) who will increasingly get older, get married, have better incomes, and start forming households and buying homes. The U.S. Census Bureau projects the number of 35-44 year-old adults to increase from 41.3 million in 2018 to 47.2 million in 2028.

MedianPrices_DOM_DB4

A Dive into 2018 Member Demographics

This blog was written by NAR Research’s intern, Bronwen Leibe.

Hi again, it’s me, the research intern! Let’s take a closer look at this year’s member profile!

In the 2018 NAR Member Profile, females still make up 63 percent of all REALTORS®. This remains notably constant throughout years of experience (girl power!). Females dominate the profession, except in function breakdown; they make up a smaller percentage of broker-owners, managers with selling, and appraisers.

The median age of REALTORS® for 2018 is 54 years old. Although, there has been a slight increase in younger REALTORS® (30 years old and younger) to 5 percent.  The consistent largest age group, those 65 years and older, has increased from 17 percent to 20 percent of all REALTORS®. As a large population embarks on retirement, there will be the need for other generations to enter into the industry.

Interestingly, REALTORS® aged 45 to 54 are a larger portion with 2 or less years of experience than REALTORS® aged 30 years old and younger. Are people coming from other occupations? Well, only five percent of REALTORS® reported real estate was their first career. With 95 percent coming from another occupation, were their previous jobs helpful to a transition in real estate? Thirty-two percent of REALTORS® had a previous career in management, business, finance or sales/retail. To me, those industries’ skills are reasonably applicable to real estate.

Conjointly, education at all levels is a valuable asset for an occupation. Thirty percent of REALTORS® have had some college education, 13 percent have their Associate’s Degree. A third of real estate agents have Bachelor Degrees, while 13 percent have a graduate degree. Nonetheless, investment in your occupation is just as noteworthy as investment in your education. Seventy-two percent of REALTORS® said that real estate was their only occupation— showing that agents heavily invest their time into the industry. In fact, a considerable majority of 52 percent work 40 or more hours per week.  On top of working in real estate, two-thirds of NAR members volunteer in their communities! Already, REALTORS® play a big role in community building and it is admirable that NAR members are contributing outside of their occupation.

 

Second Quarter Single Family Metro Market Prices

The National Association of REALTORS® quarterly home prices increased again this quarter. Prices continue to drift up this quarter with 90% of the markets showing home price appreciation. We can also look at the top metro areas whose price grew the fastest. Housing affordability is down and for first time buyers qualifying incomes are rising along with the down payment on a new home. Knowing the mortgage rates and the qualifying incomes will help potential homeowners figure out what metro areas are affordable for them. Here is a look at the metro areas with the strongest price growth of the second quarter 2018, as well as a look at the yearly change in median existing single-family home prices for the top five highest and lowest growth metro areas of the second quarter 2018.

These are the top five single-family metro areas with the highest home price appreciation:

These are the bottom five single-family metro areas that had a decline in home price appreciation:

These are the most expensive metro areas for the second quarter 2018:

These are the least expensive metro areas for the second quarter 2018:


Marilia Cathcart, GRI, E-PRO, CHS, HPS

City and Coast Properties
Broker/Mortgage Broker
CA BRE License #00496226
717 Union St. Ste K
San Diego, CA 92101
NMLS Licenses #385315 & 244536
Notary Public -  CA - Comm. # 1916637
Phone: 619-300-5008
marilia@cityandcoastproperties.com

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Marilia Cathcart’s professionalism, knowledge of the real estate market, the loan process and her continuous vital support in all aspects of buying and selling a home were invaluable and very much appreciated. She is easy to work with, personable and made the whole loan process, as well as buying and selling our home very smooth and uncomplicated. It is wonderful to find someone like Marilia who will go the extra mile to assure peace of mind every step along the way. Her availability, and most of all her professionalism, generosity and kindness make her an outstanding representative of her profession. She took us under her wing and guided us through every detail to completion. My husband and I will not hesitate to recommend Marila Cathcart to anyone who is thinking of securing a loan or who is looking to buy or sell their home – she is the BEST. Oscar and Rita Carlson
Endorsement for Marilia Cathcart: In my career as a physician-scientist, I have lived in the northeast, southeast, northwest, and southwest USA, as well as in the middle of the country. As was my custom when moving to a new city, as soon as I knew I would be joining the faculty at UCSD, I flew to town, rented a car, and drove around until I found an attractive neighborhood near my future workplace. I then went to the nearest shopping area for that community, and walked into the realtor offices, tucked to the side of the grocery store. There she was, standing inside the door with a big smile to greet this weary traveler, the lady who would change my life for the better, Marilia Cathcart. She not only showed me houses while I was in town, but continued to send me pictures and information on prospects after I had returned to Seattle where I was finishing training. She paid close attention to what I said I was looking for, the health problems I needed to accomodate, and found many wonderful possibilities. When we found my dream house, she helped me see how I would be able to afford it by calculating how much the mortgage interest deduction would save me in taxes. She found me a banker that gave me the loans I needed, she found me wall-to-wall carpeting at wholesale prices, and she even fixed me up with a very attractive and nice young man I still think about. I ended up so crazy about that house that I wish I still lived there. When I had to move back east, she helped manage that California property for me, and when I finally needed to sell it, she handled that, too, in the middle of a real estate slump, no less. I had bought the house in 1977, and sold it in 1991, so this all may seem like ancient history, but is not the end of the story. When I retired in 2000 and decided to move back to San Diego County, she reprised her role as lifesaver. After looking at loads of houses both physically and now with computer assistance, on line, she found me another perfect house for my needs. She later helped me find a reliable outfit to refinance my loan when the interest rates dropped sufficiently. I have been in this home ten years now, and they will need dynamite to dislodge me. Marilia Cathcart is, quite frankly, the best real estate manager/seller/broker I have ever dealt with, and from coast to coast, there have been quite a few. She has a wonderful business sense, and is frugal with both the buyer's and the seller's money--I know because she has handled both for me. She is also a terrific "people person", with good instincts about what people want, and what will work for them. She was "networking" before the word was invented-- she would call it making friends, and putting people together who can help each other. Since she knows everybody, and never forgets a good guy, when you know Marilia, you potentially know a whole phonebook-full of good guys who can do anything from give you a mortgage loan to fix your sprinkler. As an added bonus, she is just a lovely human being, and a pleasure to know, even after nearly 34 years. Marilia Cathcart has my highest recommendation, without reservation. Charlotte B. McCutchen, M.D. Dr Charlotte B. McCutchen
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